Each of these companies is far more diverse than Robinhood, and their valuations are not comparable.
And, it is irrational to compare startup valuations to established companies. They're not the same category. If they were, we'd look at F and GM and wonder why anyone would ever invest in TSLA (though, that's maybe not a great example because I suspect F and GM are better investments than TSLA right now, but not because they are more diverse or whatever...but, because there's a lot of risk built into TSLA due to sloppy management). But, it's easy to find examples of old companies beating new companies that seemed to be stronger investments. Google vs. Yahoo, Amazon vs. Borders, etc.
Robinhood may be the biggest provider of 401k services in ten years. Or, they might partner with storefronts to offer banking+ services. Or, they might just keep bringing in new small dollar customers and eking out tiny profits by being more efficient; there's plenty of room at the bottom. Those other guys charge ten bucks a trade (or more)! You can bet all the people tucking away $100 from each paycheck don't want to lose 10% of it to fees right off the top. McDonald's doesn't make a lot of money from each customer, but they have a lot of customers.
I have an Ameritrade account that I've had for 25 years (well, it was Datek back then), and I have a Robinhood account. I stopped automatic withdrawals to Ameritrade a year or two ago, and now all my trading happens on Robinhood. It's just a lower-friction experience. If Robinhood goes public, I'll consider buying, because it's a good and novel product in a market with a lot of money changing hands.
Supported by this new big round raise.
Uhh, hate to break it to you but startups don't get "special valuations" because someone calls them startups. That's just not how it works. There's a little thing called "comps" that are used when companies get valued and no banker says "oh thats a startup so their valuation is different".
Source: M&A guy.
Is this condescending tone necessary?
I was suggesting growth plays a large role in why startups are valued differently than established businesses, and I don't see how you can argue that a rapid growth company will be valued according to the same metrics as a company with very low growth.
Is it necessary to be so matter-of-fact and imply that people aren't being rational (and thus inferior to your clearly rational point of view ). You're not wrong, the tone isn't necessary but I guess I was just following your lead.